Like most subject areas in the health field, Aged Care has many terms that be confusing to the inexperienced. Knowing the meaning can help the family navigate the aged care system.
The accommodation supplement is payable on behalf of residents receiving permanent residential aged care who do not have the capacity to contribute to all or part of the cost of their accommodation.
Aged and Community Services Australia (ACSA)
A national peak body for not-for-profit providers of aged and community care in Australia.
Aged Care Act 1997 (the Act)
The primary legislation governing the provision of aged care services.
Aged Care Approvals Round (ACAR)
A competitive application process that enables prospective and existing approved providers of aged care to apply for a range of new Australian Government funded aged care places and financial assistance in the form of a capital grant.
Aged Care Assessment Team (ACAT)
ACATs are teams of medical and allied health professionals who assess the physical, psychological, medical, restorative, cultural and social needs of frail older people and help them and their carers to access appropriate levels of support.
Aged Care Financing Authority (ACFA)
ACFA is statutory committee who provides independent advice to the Australian Government on funding and financing issues, informed by consultation with consumers, and the aged care and finance sectors.
Aged Care Funding Instrument (ACFI)
The classification instrument used to pay subsidies to residential aged care services.
Aged Care Pricing Commissioner
The Aged Care Pricing Commissioner is an independent, statutory office holder appointed under the Aged Care Act 1997 and reports to the Minister for Aged Care.
Aged Care Sector Committee (ACSC)
The ACSC provides advice to Government on aged care policy development and implementation and helps to guide future reform of the aged care system.
Agreed accommodation price
Accommodation prices agreed between providers and prospective residents prior to entry, as reported by providers through the Aged Care Entry Record.
An approved provider of aged care is an organisation that has been approved by the Secretary of the Department of Health to provide residential care, home care or flexible care under the Aged Care Act 1997.
Assistance with Care and Housing for the Aged (ACHA)
ACHA is a program which provides a range of supports for eligible clients, who are at risk of becoming homeless or are homeless, to remain in the community through accessing appropriate, sustainable and affordable housing and linking them to community care. From 1 July 2015 the ACHA program was incorporated into the new Commonwealth Home Support Programme.
Australian Bureau of Statistics (ABS)
The Government agency responsible for the production and dissemination of statistics in a range of key areas.
Australian Nursing and Midwifery Federation (ANMF)
The ANMF is the union for registered nurses, enrolled nurses, midwives, and assistants in nursing doing nursing work in every state and territory throughout Australia.
The number of days for which a place was available to be occupied by care recipients.
RAD Asset Cover
Provides an indication of the extent to which the RAD is covered by assets. It is calculated as Total Assets/Total RAD.
Site where an extension to an existing aged care operation is possible. Care days The number of days for which care was actually provided to a care recipient in an aged care place.
Catholic Health Australia (CHA)
Catholic Health Australia is a large non-government provider grouping of health, community and aged care services in Australia, nationally representing Catholic health care sponsors, systems, facilities and related organisations and services.
Commonwealth Home Support Programme (CHSP)
This program provides entry-level support services designed to help frail older people stay in their homes. It was introduced on 1 July 2015 and consolidates four former programs: Commonwealth Home and Community Care (HACC); the National Respite for Carers Program (NRCP); Day Therapy Centres (DTC); and Assistance with Care and Housing for the Aged (ACHA).
Community Aged Care Package (CACP)
Care consisting of a package of services provided to a person who lives in their own home. This type of care was replaced on 1 August 2013 when the new home care package levels 1-4 were introduced. A CACP package is generally consistent with the level of care provided in a level 2 home care package.
Conditional Adjustment Payment (CAP)
The CAP was intended to provide medium term financial assistance to providers while encouraging them to become more efficient through improved management practices. Consequently, residential aged care providers were only eligible to receive the CAP if they achieved certain business outcomes such as providing staff training, making audited accounts available each year to the Department of Health and taking part in a periodic workforce census. The CAP was rolled into the basic care subsidy rates as of 1 July 2014.
Consumer Directed Care (CDC)
Consumer Directed Care gives consumers greater choice over their own lives by allowing them to decide what types of care and services they access and how those services are delivered.
Consumer Price Index (CPI)
CPI measures the changes in the price of a fixed basket of goods and services, acquired by household consumers who are resident in the eight state and territory capital cities.
Council on the Ageing (COTA)
COTA Australia is the peak national organisation representing the rights, needs and interests of older Australians.
Culturally and Linguistically Diverse (CALD)
Consumers who have particular cultural or linguistic affiliations due to their: place of birth or ethnic origin, main language other than English spoken at home, proficiency in spoken English.
Represents the ability to meet short term debt through current assets. A current ratio of more than one indicates that an organisation’s current assets exceed its current liabilities. It is calculated as Current Assets/Current Liabilities. In the aged care context, current ratio needs to be interpreted with caution given all RAD’s held by providers are treated as current liabilities.
Daily Accommodation Payment (DAP)
A rental-type payment which applies to people who entered care after 1 July 2014 and who asked to contribute towards their accommodation costs.
Day Therapy Centres Program (DTC)
The DTC program provides a wide range of therapy and services to eligible frail, aged people living in the community and to residents in Commonwealth funded residential aged care facilities. It assists them to regain or maintain physical and cognitive abilities which support them to either maintain or recover a level of independence. As of 1 July 2015 the DTC program became part of the new Commonwealth Home Support Programme.
Department of Health (The Department)
The department that administers the Act and regulates the aged care industry on behalf of the Commonwealth.
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)
Net profit after tax with interest, taxes, depreciation, and amortisation added back to it, and can be used to analyse and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions. EBITDA margin EBITDA margin shows the average net profit after tax (with interested, taxes, depreciation and amortisation added back into it) generated for each $1 of revenue earned. It’s calculated as EBITDA/total revenue.
Extended Aged Care at Home (EACH)
A package of home care services provided to a person who lives in their own home and not in residential care, who requires a high level of care. This type of care was replaced on 1 August 2013 when the new home care package levels 1-4 were introduced. An EACH package is generally consistent with the level of care provided in a Level 4 home care package.
Extended Aged Care at Home Dementia (EACH-D)
A package of home care services provided to a person who lives in their own home with dementia and not in residential care, who requires a high level of care. This type of care was replaced on 1 August 2013 when the new home care package levels 1-4 were introduced. An EACH-D package is generally consistent with the level of care provided in a level 4 home care package, with the additional Dementia and Cognition supplement also being paid.
A residential aged care facility, approved under the Aged Care Act 1997 to provide government subsidised accommodation and care.
Financial Accountability Reports (FARs)
FARs were non-audited financial statements submitted by approved providers of home care services up until 2014-15 when they were replaced by the new Home Care Packages financial reports.
Financial Planners Association (FPA)
The FPA represents the interests of the public and Australia’s professional community of financial planners.
For those in either a residential or home care setting, that may require a different care approach than that provided through mainstream residential and home care.
General Purpose Financial Report GPFR)
A financial report intended to meet the information needs common to users who cannot command the preparation of specific reports for their own purposes.
In the context of this Report, the term references a provider that is owned by a local, state or territory government.
Site where an aged care operation is built for the first time.
Gross Domestic Product (GDP)
GDP is the market value of all officially recognised final goods and services produced within a country in a year, or over a given period of time.
High care facility
A facility where over 80 per cent of residents are classified as ‘high care’. The distinction between high care and low care in permanent residential care was removed from 1 July 2014.
Higher accommodation supplement
A higher maximum accommodation supplement was introduced on 1 July 2014 for aged care homes that have been built or significantly refurbished since 20 April 2012.
Home and Community Care HACC)
A program that provides basic support and maintenance to people living at home to help avoid premature or inappropriate admission to long-term residential care (Victoria and WA only). Note: the former Commonwealth HACC program was consolidated into the new CHSP from 1 July 2015.
Home based care provided through a home care package to help older Australians to remain in their own homes. Home care is provided through the Home Care Packages Programme.
Home care package
A package of services tailored to meet the care needs of a person living at home. The package is coordinated by an approved home care provider, with funding provided by the Australian Government (with some contributions from the consumer). Home care packages range from level 1 to 4 depending on the care needs of the consumer. This program commenced on 1 August 2013 and replaced the Community Aged Care Programme.
Home Care Packages Programme
An Australian Government funded programme which has as its objectives to assist people to remain living at home and enable consumers to have choice and flexibility in the way that care and support is provided at home. The Home Care Packages Programme commenced on 1 August 2013.
The Homeless supplement commenced from October 2013, to better support aged care homes that specialise in caring for people with a history of, or at risk of, homelessness. This funding is in addition to the funding provided under the Viability supplement.
Shows the number of times that EBITDA will cover interest expense. Indicates an organisation’s ability to service the interest on its debt. It is calculated as EBITDA/Interest Expense.
Leading Age Services Australia (LASA)
LASA is a peak body for aged service providers.
Low care facility
A facility where over 80 per cent of residents are classified as ‘low care’. The distinction between high care and low care was removed from 1 July 2014.
Maximum accommodation price
Maximum accommodation prices set by providers for a room (or bed in a shared room) set by residential providers and published on My Aged Care. These are maximum prices (providers and residents may agree lower amounts), that apply to residents who are not eligible for support with their accommodation costs.
Maximum Permissible Interest Rate (MPIR)
The MPIR is the rate used to calculate the equivalent daily payment of a refundable deposit. The refundable deposit is multiplied by the MPIR and divided by 365 days. The MPIR is determined in accordance with Section 6 of the Fees and Payments Principles 2014 (No. 2). The MPIR is available on the Department of Health website and is updated every three months.
Mixed care facility
A facility where less than 80 per cent of residents are high care residents and more than 20 per cent are low care residents. The distinction between high care and low care was removed in permanent residential care from 1 July 2014.
My Aged Care
The main entry point to the aged care system in Australia. My Aged Care aims to make it easier for older people, their families, and carers to access information on ageing and aged care, have their needs assessed and be supported to find and access services.
National Disability Insurance Scheme (NDIS)
The NDIS offers support for Australians who are under 65 years of age with a significant and permanent disability, their families and their carers.
National Respite for Carers Program (NRCP)
The NRCP aims to support caring relationships between carers and their dependent family members or friends by facilitating access to information, respite care and other support appropriate to their individual needs and circumstances and those of the people for whom they care. The NRCP was integrated into the CHSP from 1 July 2015.
Net Profit Before Tax (NPBT)
The NPBT is determined by revenue minus expenses except for taxes. Net Profit (Before Tax) Margin Shows the average profitability generated on each $1 of total revenue. It is calculated as Net Profit Before Tax/total revenue.
Operational place refers to a place that was allocated and has since become available for a person to receive care.
Pay as you go (PAYG)
PAYG instalments is a system for making regular payments towards your expected annual income tax liability.
Per consumer per annum (pcpa)
An annual average financial figure relating to home care consumers.
Per consumer per day (pcpd)
A daily average financial figure relating to home care consumers.
Per resident per annum (prpa)
A measure relating to residential aged care residents that converts service financial data to daily amount per resident.
Per resident per day (prpd)
A daily average financial figure relating to residential aged care residents.
Provision target ratio
The Australian Government regulates the supply of subsidised residential aged care and home care packages by specifying a national provision
target of subsidised operational aged care places. These targets are based on the number of persons for every 1,000 people aged 70 years or over, known as the aged care provision target ratio. The population-based provision formula ensures that the supply of services increases in line with the ageing of the population, while capping the number of places limits the fiscal risk associated with aged care.
Refundable Accommodation Deposit (RAD)
A lump sum payment applicable to people who entered care after 1 July 2014 and who are asked to contribute towards their accommodation costs.
Geographic reference to areas classified by the Australian Bureau of Statistics as inner regional, outer regional, remote and very remote.
Regional Assessment Services RAS
provides in home, face to face assessments of new and existing clients/carers to assess their eligibility to access CHSP services.
Indicates where a provider, service or consumer is located based on whether they are metropolitan or regional areas. A provider is classified as metropolitan if more than 70 per cent of its services are located in metropolitan areas and similarly classified as regional if 70 per cent of its services are located in regional areas.
Report on the Operations of the Aged Care Act 1997 (ROACA)
A legal requirement under the Act, the ROACA is tabled in Parliament in November each year and presents an annual snapshot of facts and figures on Commonwealth funded aged care services in Australia.
Resident Classification Scale (RCS)
The basic tool for residential aged care funding prior to 20 March 2008, when it was replaced by the ACFI. The RCS is based on a resident’s classification assessed on a scale from 1-8. A very small number of residents, who entered care before 20 March 2008 are still classified using the RCS through grand-parenting arrangements.
Residential aged care
A programme that provides a range of care options and accommodation for older people who are unable to continue living independently in their own homes.
Is care focusing on enhancing the physical and cognitive function of people who have lost or are at risk of losing condition and independence. The Short-Term Restorative Care (STRC) Programme which commenced in February 2017, is a flexible care program to provide restorative care to older people to improve their capacity to stay independent and living in their own homes.
Refers to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt. This is recorded under shareholders’ equity on the balance sheet.
An amount that an approved provider is allowed to deduct per month from an accommodation bond for up to five years. The maximum retention amount is set by the Australian Government. Retentions are not permitted for new residents entering residential aged care on or after 1 July 2014.
Return on Assets
Indicates the productivity of assets employed in the organisation. It is calculated as EBITDA/total assets.
Return on Equity/ Return on Net Worth
Indicates the productivity of equity/net worth employed in the organisation. It is calculated as EBITDA/net worth.
Refers to the number of services operated by a provider.
Short-term Restorative Care (STRC)
In the 2015 Budget, the Australian Government announced the expansion of flexible aged care initiatives. A new form of flexible care, the STRC Programme, has been established to increase the care options available to older people, through a time-limited, goal-oriented, multi-disciplinary and coordinated package of services. Each care package is designed with and agreed to by the care recipient, and may be delivered in a home setting, a residential setting, or a combination of both. The new care type builds on the success of the existing Transition Care Programme, which assists older people to return home after a hospital stay. However unlike transition care STRC is available to people that have not had a hospital stay.
Refers to the number of beds operated by a specific residential aged care service or the number of home care packages operated by a home care service.
Survey of Aged Care Homes (SACH)
Each year SACH seeks information on accommodation payments and planned and actual building activity during the previous financial year for each operating residential aged care service.
Transitional Business Advisory Service (TBAS)
TBAS was a free financial advice service for providers on the 1 July 2014 accommodation payment reforms. It was provided by KPMG and funded by the Commonwealth to assist with transition during the implementation of the aged care reforms. It ceased operation on 30 June 2015.
For those requiring time-limited, goal-oriented and therapy-focused packages of services after a hospital stay. This program was integrated into the STRC in 2016-17. Transition care is provided in an acute setting.
The viability supplement for residential and home care is a payment made under the Act to assist aged care services in rural and remote areas with
the extra cost of delivering services in those areas.
Weighted Average Cost of Capital (WACC)
The average cost of financing the assets of the entity weighted by the use of its debt and equity.
Defined as current assets less current liabilities.